A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Chadmere Capital Inurance and Financial Services, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Chademere Capital Insurance and Financial Services
(803) 242-1050



By Ian Berger, JD
IRA Analyst

Just a few weeks after the start of the baseball season, the IRS has thrown us a curveball by apparently interpreting the SECURE Act 10-year payout rule in a totally-unexpected way.

We say “apparently” because the IRS explanation isn’t very clear. And even if it was clear, the IRS offered the information in an informal publication that should not be relied on.

Here’s the backstory: One of the major changes made by the 2019 SECURE Act was the elimination of the stretch for many beneficiaries of inherited IRAs. If an IRA owner died before 2020, his individual beneficiary could satisfy the required minimum distribution (RMD) rules by spreading annual payouts over the beneficiary’s life expectancy. For a young beneficiary, that could be 80 years or longer.

But Congress put an end to the stretch IRA for most non-spouse beneficiaries of owners who died after 2019. For those beneficiaries, the SECURE Act replaced the stretch with a 10-year payment rule. That rule requires the entire IRA to be paid out by the 10th anniversary of the IRA owner’s death.

Just about everyone thought the 10-year rule meant no annual RMDs were required. In that case, the beneficiary would have total flexibility: She could take out as much or as little from the inherited IRA in years 1-9, as long as she emptied the entire account by year 10.

That’s exactly how the IRS has interpreted the 5-year payout rule. Before the SECURE Act, the 5-year rule was a payment option for the beneficiary of an IRA owner who died before his required beginning date (RBD). Even after the SECURE Act, the 5-year payout is required when an IRA owner dies before his RBD without designating an individual beneficiary.

But the IRS surprised everyone in a recent revision of Publication 590-B by treating the 10-year rule differently than it has treated the 5-year rule. The IRS strongly hinted that that the 10-year rule requires annual RMDs to be paid in years 1-9 and the remaining IRA funds to be paid out in year 10. Here’s an example from Publication 590-B that seems to say that:

Example: Your father died in 2020. You are the designated beneficiary of your father’s traditional IRA. You are 53 years old in 2021, which is the year following your father’s death. You use Table I [the IRS Single Life Expectancy Table] and see that your life expectancy in 2021 is 31.4. If the IRA was worth $100,000 at the end of 2020, your required minimum distribution for 2021 would be $3,185 ($100,000 ÷ 31.4).

We need to stress that the IRS’s apparent interpretation in Publication 590-B is not official guidance. For this reason, we recommend that beneficiaries subject to the 10-year rule hold off from taking RMDs in 2021 until later this year by which time the IRS will hopefully clarify this mess with official guidance.


Ready To Take



For more information about any of our products and services, schedule a meeting today.

Or give us a call at (803) 242-1050

Investment advisory services offered through Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser. Nothing on this website constitutes investment, legal or tax advice, nor that any performance data or any recommendation that any particular security, portfolio of securities, transaction, investment or planning strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations, execution of required documentation, and receipt of required disclosures. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #175083.

 ADV Part 2A & Form CRS              Privacy Policy